Low-priced tablets, meanwhile, will drag down revenue from PCs and other devices

InfoWorld|Jan 3, 2013

IT spending will hit $3.7 trillion this year and $3.8 trillion by 2014, thanks in part to increased investments in enterprise software and IT services, according to research company Gartner. Overall spending would be higher, in fact, were it not for low-priced tablets and other mobile devices bringing down the computer prices.

Gartner's outlook for IT spending is rosier today than it was in Q3; the firm predicts a 4.2 percent boost now, up from 3.8 percent. "Uncertainties surrounding prospects for an upturn in global economic growth are the major retardants to IT growth," said Richard Gordon, managing vice president at Gartner. "This uncertainty has caused the pessimistic business and consumer sentiment throughout the world. However, much of this uncertainty is nearing resolution, and as it does, we look for accelerated spending growth in 2013 compared to 2012."

Broken down by segment, Gartner anticipates spending on computing devices will hit $666 billion in 2013, a 6.3 percent increase over the $627 billion spent in 2012. The growth will slow to 4.2 percent at $694 billion in 2014, thanks in part to the influx of low-priced tablets and devices. These reductions will be partially offset by marginal increases in spending on mobile phones and printers.

"The tablet market has seen greater price competition from Android devices as well as smaller, low-priced devices in emerging markets," Gordon said. "It is ultimately this shift toward relatively lower-priced tablets that lowers our average selling prices forecast for 2012 through 2016, which in turn is responsible for slowing device spending growth in general, and PC and tablet spending growth in particular."

Enterprise software makers stand to see the significant gains from increased IT spending. Gartner expects a 6.4 percent increase in spending on software this year, up from $278 billion in 2012 to $296 billion in 2013. The figure will hit $316 billion in 2014, a 6.8 percent increase. The key markets for 2013 will include security, storage management and CRM. "However, beginning in 2014, markets aligned to big data and other information management initiatives, such as enterprise content management, data integration tools, and data-quality tools will begin to see increased levels of investment," according to Gartner.

Research company Forrester is similarly bullish about increased spending on enterprise software, citing SaaS (software as a service) and data-driven smart apps as the major growth engines, TechCrunch reported. The SaaS market will increase 25 percent in 2013 to $59 billion and will reach $75 billion in 2014, according to Forrester, while the smart-computing software market -- data analytics and business intelligence apps -- will generate $41 billion in spending this year and $48 billion in 2014.

As more companies move to the cloud in coming years, business will boom for IT service providers. Companies spent $881 billion on services last year and will spend $927 billion on them in 2013, a 5.2 percent increase. Come 2014, IT-services spending will hit $974 billion, growth of 5.1 percent.

The global telecom services market continues to be the largest IT spending market at $1.6 trillion in 2012. Spending will hit $1.7 trillion in 2013 and will remain flat going into 2014 and beyond. The reason: Increased investment in mobile data services will result in lower spending on fixed and mobile voice services markets. By 2016, Gartner forecasts that mobile data will represent 33 percent of the total telecom services market, up from 22 percent in 2012.

Finally, spending on data center systems will edge up to $147 billion in 2013, a 4.5 percent increase over the $141 billion spent in 2012. The figure will hit $154 billion in 2014, Gartner anticipates.